Dangote may seek US$5bn in London share sale

07 December 2010

Dangote Cement Plc is working with three banks to raise as much as US$5bn in a London share sale, Bloomberg quoted two sources as saying.

Dangote will probably seek US$3bn-$5bn in a London sale of global depositary receipts, valuing the company at as much as US$20bn, said the people, who declined to be identified because the plans are private. Goldman Sachs Group Inc, JPMorgan Chase & Co. and Morgan Stanley are helping Dangote prepare the sale, slated for next year, the sources said.

The Lagos-based company raised NGN13.5bn (US$90m) in an initial public offering in October.

Dangote Cement is planning the sale because the Nigerian market isn’t “deep” enough to absorb the volume of shares needed to meet a required 25 percent free float, said Babatunde Obaniyi, an analyst at Afrivest West Africa Ltd, one of the advisers on Dangote’s October IPO.

“The best thing to do is to look for a market that is deep and can absorb the volume of shares without having a negative effect on pricing,” Obaniyi said by phone from Lagos today.